What happened?
Shares of aerospace and defense company Howmet (NYSE: HWM) jumped 2.9% in the morning session after the company delivered a 29% increase in third-quarter revenue, raised its full-year outlook, and authorized a $5 billion addition to its share repurchase program.
According to a company press release, Howmet reported third-quarter revenue of $2.7 billion vs S&P analysts’ estimates of $2.59 billion (29.4% year-on-year growth, 4.4% beat), alongside GAAP diluted earnings per share of $1.42 and adjusted earnings per share of $1.46 vs S&P analysts’ estimates of $1.37 (6.6% beat). The company repurchased $500 million of its common stock during the quarter prior to the board approving the additional $5 billion repurchase authorization.
Furthermore, executive leadership raised full-year 2026 guidance and introduced full-year 2027 revenue targets of approximately $11.5 billion. Expanding capital return plans alongside elevated multi-year revenue projections signaled firm executive confidence in ongoing aerospace demand and long-term cash flow generation.
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What is the market telling us
Howmet’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 8.9% on the news that it reported fourth-quarter 2025 financial results that surpassed analyst expectations and provided a strong revenue forecast for the upcoming quarter.
The company reported revenue of $2.17 billion for the quarter, a 14.6% increase from the previous year, beating Wall Street's estimates. The growth was driven by a solid performance in its Engine Products segment. Adjusted earnings per share came in at $1.05, which was 8.7% ahead of consensus forecasts and marked a nearly 42% jump compared to the same period last year. While the company's operating margin was flat year-over-year, its free cash flow margin saw a notable increase from 20% to 24.4%. Looking ahead, Howmet issued revenue guidance for the first quarter of 2026 that was 3.5% above analyst expectations, though its full-year earnings forecast was in line with consensus.
Howmet is down 2.8% since the beginning of the year, and at $205.85 per share, it is trading 29.7% below its 52-week high of $292.65 from August 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Howmet’s shares 5 years ago would now be looking at an investment worth $6,935.
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